What Does Alberta's Oil Wealth Pay For? Not Education - Alberta Is Dead Last In Per-Pupil Spending Among Provinces

[hatrack]

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Some kids like math, but the math on Alberta’s oil-dependent finances is definitely not fun. Smith’s single-minded fixation on the oil and gas industry has left the province dangerously dependent on highly cyclical oil revenue. A yawning chasm between UCP oil enthusiasm and what is happening in the real world may soon devastate Alberta’s ability to provide basic services like education and health. Despite Smith’s constant cheerleading for additional bitumen extraction, an eye-popping global oil glut of up to 4 million barrels per day in excess supply is projected for the coming year. Some of this is part of normal price volatility, but a growing portion of the global surplus is due to the structural decline in oil demand due to rapid electrification in China and the developing world.

A fiscal plan tabled by Alberta in February details the disconnect between Smith’s pro-oil hype and the ton-of-bricks reality soon to be crashing through her optimistic assumptions. Smith’s government projected the average price of West Texas Intermediate (WTI) crude for the current fiscal year to be $68 per barrel, rising to $71 for the budget tabled next spring and $71.50 for 2027. Last week WTI was below $57 and recent projections from the U.S. government expect crude to plunge to an average $48.50 in 2026. Similar grim projections show little improvement for 2027. Every dollar drop in the price of WTI crude puts a $750 million hole in the provincial budget. A rough calculation shows that Alberta may face a staggering budget shortfall of over $16 billion in 2026 and another $16 billion in 2027 based on current price projections. This is on top of a $6.5 billion updated deficit for the current year.

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A recent report from the right-leaning Fraser Institute documented how Alberta education spending per student is the lowest in the country. But isn’t that because Alberta has a growing population and needs to build more schools? Nope. The Fraser report also looked at per student spending minus capital costs. Alberta is still last; 28 percent below what New Brunswick spends per kid on education. But what about long-term policy choices? The Fraser report helpfully looked at the scenario where “the inflation-adjusted, per-student spending levels [had] been maintained from the 2012/13 base year.” Almost all provinces chose to substantially increase spending per student in the last decade, with a 10 percent average increase nationally. Alberta was again dead last, showing a decline by over 15 percent since 2013.

Is that what prosperity looks like? Alberta bitumen production increased over 90 percent since 2013 while automation eliminated over 25,000 oil and gas sector jobs between 2014 and 2021. Those job losses are projected to accelerate, wiping out about 30 percent of the remaining oil patch workforce by 2040. And if oil prices plunge to levels seen during the COVID-19 pandemic, expect companies to curtail production as they did during the pandemic, no matter how many pipelines Smith would like to imagine.

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https://www.desmog.com/2025/10/29/what-is-albertas-oil-wealth-paying-for-not-better-education/

[Dave Bowman]

1. That greedy moron would be a perfect maga specimen if he lived south of the border.

[GiqueCee]

2. Are you referring...

... to Premier Danielle Smith? If so, you're right, she would fit right in with the Trump-humpers in the former democracy south of the border.

ON EDIT: The article doesn't mention the Premier's first name, and there's only one brief gender reference, "her". We who live south of the border have troubles of our own right now, so lacking familiarity with Canadian premiers like Smith is understandable. I have a cousin in Alberta, so I pay particular attention to what goes on there. Smith is exactly as you describe her, and she would be BFF with the likes of Empty Green and her ilk.

[paleotn]

4. Perhaps we should work a trade....

The US west coast - west of the Sierras and Cascades, US east coast from Maryland to Maine - generally east of the Appalachians, plus some Great Lakes cities, for Alberta, Saskatchewan, Manitoba and eastern BC. Donnie gets his chunk of Canada and gets rid of those pesky Liberals. Canada gets the wealthiest, most productive parts of the US. Given magat's irrational dislike for us "woke" folks, they might be dumb enough to go for it. And then, they can happily go off and be Honduras or something without our interference. Jebusland even. Whatever the hell they want.

I'm only half joking.

[paleotn]

3. Bad economics. The race to reduce oil sand cost per barrel.

Oil sands have always been one of the most expensive ways to extract petroleum and un-competitive for most of my lifetime. Cost per barrel was $80 to $100 back in the early 20 teens. When global oil prices dip below that breakeven point, oil sands are a money loser. So, the impetus has been to get production costs down as much as possible through improved technology and headcount reductions. Not surprisingly, they have to automate the hell out of production to get it to pay.

While Alberta may be a boom provence early on, that isn't going to play out even medium term. So all those people who've moved to Edmonton, Calgary and Fort McMurray will be moving elsewhere. Add the fact that global oil consumption is expected to flatten and perhaps decline in the next decade, I sometimes wonder why producers even bother. Fracking is generally a hell of a lot cheaper and less environmentally damaging in comparison to oil sand extraction. That's hard to believe, but oil sands are a ginormously nasty business and every Canadian should be ashamed. Particularly when their entire country catches fire every damn Summer. The irony isn't lost on me.